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Bush backs US oil drilling bid

AM - Thursday, 19 June , 2008 08:04:00

Reporter: Michael Rowland

TONY EASTLEY: American motorists are still only paying just over $1 a litre for fuel but concerns about the rising cost of oil has spooked the horses and the US President George W. Bush is throwing his full support behind a plan to drill for oil off the American coast.

Mr Bush says rising petrol prices have made it essential for America to dramatically increase its domestic oil production, but the move to allow offshore drilling is fraught with both economic and political dangers.

Washington Correspondent Michael Rowland reports.

MICHAEL ROWLAND: With high petrol prices threatening to do serious damage to an already struggling US economy, Mr Bush says Americans face a harsh reality.

GEORGE W. BUSH: Our nation must produce more oil and we must start now.

MICHAEL ROWLAND: The President wants to allow oil drilling off the US coastline, an activity that's been banned for nearly 30 years. He says there could be 18-billion barrels of untapped oil reserves in what's known as the Outer Continental Shelf. This would be enough to match America's current oil production for a decade.

The President has thrown down the gauntlet to the Democratic-controlled Congress, which has been vigorously opposing offshore drilling.

GEORGE W. BUSH: Congressional leaders leave for the 4th of July recess without taking action, they will need to explain why $4 a gallon gasoline is not enough incentive for them to act.

MICHAEL ROWLAND: Mr Bush's move comes just a day after the Republican presidential nominee John McCain reversed his long standing position and called for offshore drilling to begin.

But Democrats like Congressman Pete DeFazio say the big oil companies aren't exploiting the reserves already available to them on the mainland.

PETE DEFAZIO: Come on guys! They are not developing what they have now. There's 20 years supply out their underneath their idle leases that could double our domestic production and plain and simple, they haven't developed it. And then when they're done with that, then we can have a debate about more leasing in other places.

FADEL GHEIT: If we were to drill today, realistically speaking, we should not expect a barrel of oil coming out from these new resources for at least three years, maybe even five years.

MICHAEL ROWLAND: As well as dealing with opposition from the Democrats, George Bush and John McCain are going head to head with California's Republican Governor Arnold Schwarzenegger. He, like most beach-loving Californians, is strongly opposed to the prospect of oil platforms appearing offshore.

Voters in the battleground state of Florida aren't that keen either.

But the Republicans are hoping Americans' fear of ever-rising petrol prices will outweigh concerns about oil spills and the destruction of coral reefs.